Whirlpool pleased by Maytag shareholder vote

Whirlpool pleased by Maytag shareholder vote
 
Date December 23, 2005
Section(s) Local News
Brief  
 
By PETER HUSSMANN

Editor

Whirlpool officials said they were pleased shareholders agreed to the sale of the iconic American appliance maker Maytag to its Benton Harbor, Mich.-based rival on Thursday and that Newton workers will soon learn how they might take advantage of employment opportunities in the merged companies.

“We are very pleased that Maytag‘s shareholders have fully endorsed the merger,” said Jeff Fettig, Whirlpool’s chairman and CEO. “The combination of Whirlpool and Maytag will create very substantial benefits for consumers, trade customers and our shareholders. We believe this transaction will result in better products, quality and service, as well as efficiencies, which will enhance our ability to succeed in the increasingly competitive global home appliance industry.”

Maytag shareholders approved the merger plan at a special meeting in Newton on Thursday. Nearly 98 percent of the votes cast were in favor of the $1.7 billion buyout in a $21 per share cash and stock offer.

The antitrust division of the U.S. Department of Justice continues to review the buyout offer. In order to facilitate the federal review, Whirlpool and Maytag have agreed not to close the merger before Feb. 27, 2006, without Justice Department approval. The Department also may request additional time for review.

Maytag became the target of a bidding war earlier this year after Maytag directors approved a $14 per share buyout offer from a New York City-based private equity firm, Ripplewood Holdings. Unsolicited bids from China-based Haier and Whirlpool raised the ante for the company with the board eventually cancelling the Ripplewood deal, with Whirlpool agreeing to pay the $40 million buyout clause of the contract, and raising its offer three times before reaching the $21 a share final bid.

In a letter to Maytag employees on Thursday, Fettig called the pending merger “one of the great mergers in our industry.”

“Whirlpool’s vision is what drives our business strategy, and it’s simple: We want to have our products in every home, everywhere in the world,” Fettig said in the statement.

The Whirlpool CEO also gave a brief indication of what may lie in store under a combined Whirlpool and Maytag operation.

“Innovation is critical to our future success, and I believe that when joined with Maytag‘s strong heritage and dedicated people, our combined company will compete more effectively against strong domestic and global manufacturers,” he said.

He also said employment opportunities will exist for current Maytag workers.

“Until all regulatory approvals are achieved, I recognize that uncertainty exists as to what the future holds for many employees. Be assured that leaders of both companies understand this and we look forward to communicating clearly and regularly with you as appropriate when new information becomes available.

“To that end, we believe that the growth of our company will create employment opportunities. In the near future, we expect to share with you the process that we will follow for filling positions, including details on how you can actively participate in the process. We believe that the need for talented, experienced professionals in the combined company will create many exciting opportunities.”

In a proxy statement filed as part of the merger plan, Whirlpool said it plans to take one-time costs and capital investments in the $350 million to $500 million range. It also said it expects to generate approximately $300 million to $400 million of annual pre-tax savings by the third year following completion of the merger.

“Whirlpool believes that its strong operating and financial position, focus, brand management and global capabilities will enable it to enhance the Maytag brands,” the proxy stated.

A combined Whirlpool and Maytag company would create the world’s largest appliance manufacturer.

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